Amendments to the Volcker rule approved by two of the five federal agencies with jurisdiction over it relax prohibitions on proprietary (“prop”) trading and bank ownership of hedge funds and private equity funds. Changes to the Volcker rule also eliminate a “rebuttable presumption” that financial instruments held for less than 60 days are considered proprietary trading.
The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) announced the changes on Aug. 20. Approval by the U.S. Commodity Futures Trading Commission (CFTC), the Federal Reserve Board, and the Securities and Exchange Commission (SEC)—all of which have jurisdiction over the interagency rule—is expected soon.
